Amazon-backed M1xchange’s scale grows 2X in FY23, losses shrink

M1xchange, a platform that facilitates digital invoicing and discounting for MSMEs, corporates, and financiers, has posted over two-fold growth in its operating scale during the fiscal year ending March 2023. The company also managed to cut down losses marginally.

M1xchange’s revenue from operations grew to Rs 29.52 crore during FY23 as compared to Rs 14.32 crore in FY22, as per the company’s consolidated financial statements with the Registrar of Companies.

Founded in 2017, M1xchange is a digital invoicing and discounting platform that ensures working capital requirements without the need for extensive bank processes. The company generates revenue through professional fees against these services.

Besides operating income, the company also made Rs 3.56 crore from interest and gains on financial assets. At the end,  M1xchange’s overall revenue stood at Rs 33.1 crore in the last fiscal year.

Employee benefits remained the largest contributor to the expenses and formed 68.4% of the total cost. This cost surged 59.6% to Rs 28.05 crore in FY23 from Rs 17.58 crore in FY22. Significantly, this also includes employee stock option scheme expense of Rs 1.5 crore in FY23.

Legal & professional expenses inclined 36.5% to Rs 2.13 crore in FY23 from Rs 1.56 crore in FY22. Marketing cum business development expenses went up over 21% to Rs 1.88 crore while data center and communication cost spiked around 93% to Rs 1.43 crore.

M1xchange’s total expenditure increased by 57.3% to Rs 41 crore during FY23 in comparison to Rs 26.07 crore in the preceding fiscal year.

Despite rising expenditure, M1xchange reduced its annual losses by 7.5% to Rs 7.92 crore in FY23 against Rs 8.56 crore in FY22. The company also managed to shorten its operating cash outflows by 16.8% to Rs 6.66 crore during the year from nearly Rs 8 crore in FY22.

As per Fintrackr’s analysis, M1xchange’s EBITDA margin strengthened to -15.53% during the year which can be attributed to improved financial performance. On a unit level, the company spent Rs 1.39 to earn a rupee of operating income in FY23.

M1xchange is reportedly projected over 2X growth in the total value of bill discounting through its system to Rs 25,000-30,000 crore. In April 2023, it also signed a partnership with Mastercard to offer a digital invoice discounting solution to farmers, and agri-MSMEs.

The company has raised over $19 million to date, including Rs 38 crore ($4.7 million) funding from IndiaMART and BEENEXT in November 2022. Its other backers include Amazon and Mayfield.